This subproject investigates the evolving structure of Medicare expenditures in order to: identify the groups of enrolles and types of care responsible for expenditure growth; project future expenditures for the Medicare program; and assess the impact of alternative policies toward controlling the growth of Medicare outlays. The primary data source for the proposed analysis is the Continuous Medical History Sample, a data base created from Health Care Financing Administration files. Both aggregate and longitudinal files will be constructed from these data to analyze individuals-specific expenditure patterns, to characterize disease-specific expenditures, and to identify major factors underlying Medicare expenditure growth. The cohort analyses, also based on these data, explore the distribution of Medicare expenditures across and within cohorts, and the Medicare outlays and for exploring the impact of such policy options as modifying deductibles, caps on benefits, and the eligibility age. They can also be used to assess the likely impact of restrictions on the rate of the dissemination of new technologies.